Chopper scam: India bans Finmeccannica from bidding future contracts

New Delhi: In the backdrop of alleged VVIP chopper deal scam, the Defence Ministry on Tuesday barred scam-tainted Italian defence firm Finmeccannica from participating in future tenders while deciding to carry out ongoing contracts with the group and its subsidiary AgustaWestland, more than a month after putting all deals on hold.

According to reports, the Defence Ministry issued an order on how to go about dealing with Finmeccannica and its subsidiaries in the backdrop of allegations of payment of kickbacks to the tune of Rs 360 crore in the Rs 3600 crore VVIP chopper deal which is under investigation.

Further the Defence Ministry officials also clarified that this partial lifting of ban on Finmeccannica would not apply to AgustaWestland's Rs 3,600 crore contract to supply 12 VVIP choppers to the Air Force as it has already been scrapped.

The announcement has come a week after the Attorney General Mukul Rohatgi had advised the Indian government to reconsider the blanket blacklisting of Finmeccannica as it could have adverse impact on the country`s defence preparedness.

The Defence Ministry had sought the opinion of AG on whether the company should be blacklisted, sources said.

Finmeccannica is the parent firm of AgustaWestland, whose Rs 3,600 crore deal to supply 12 VVIP choppers has been cancelled due to allegations of corruption and breach of pre-contract obligations by the previous UPA government.

The Defence Ministry had put on hold all defence deals with Finmeccanica after the scam broke last year and the AG has now said that that is likely to hit the modernisation of armed forces in a big way as the group companies are involved in defence projects worth over Rs 30,000 crore.

The ministry had also asked the departments under it to stop any kind of dealings with the firms named in the VVIP chopper scam FIR, including AgustaWestland, IDS Tunisia, IDS Mauritius, IDS Infotech, Mohali, and Aeromatrix Solution Ltd, Chandigarh.

The government has also deferred a Rs 6,000-crore 16 helicopter deal for the Navy in which one of the two companies is linked to Finmeccanica along with a deal to equip the under-construction Scorpene submarines with the WASS torpedos.

In a recent decision, the Ministry had allowed the armed forces to continue procurements from the British firm Rolls Royce, which is facing a CBI probe for allegations of involving agents and payment of commissions to get deals from the state-run HAL.